How to Price a Membership
If you've made a decision to create an online membership website or you're thinking about it since you're intrigued by the potential of a model for community-based business, that's awesome! Membership sites are amazing and have the awesome capabilities to grow in ways that you won't see anywhere else in the economy of creators.
Just think about it. Imagine being able to gather an entire group of people in something important to you and them as they guide them through a transformation they're interested in. That's the power of a membership site.
One of the most difficult aspects of starting out is figuring out what you should actually cost for your product. How can you determine what is the best price, so that you don't be in the position of A. Working for nothing or, B. Inflating your prices so that the audience is unable to pay.
The good news is, we've got the data. So in this article, we'll go over what we've learned about the best way to charge the membership sites we found in our study of 12,000 . (Don't forget, if you want to start with your very personal Mighty Network, you can try it for free! )
This article
1.1. Paid plans are sold
1.2. You don't need millions of followers
1.3. The growth process is natural
1.4. Paid membership drives engagement
2. Average membership site cost for a Mighty Network
3. Questions to consider in determining the price of a membership site
3.1. Can it scale?
3.2. How does it fit within your revenue model?
3.3. How much do you have to spend to stay on the right track?
4.1. Members should be invested
4.3. Consider the options of your members
4.4. Prices based on the income goals
4.5. One-time vs recurring fees
4.6. Member Churn
What data we have
Paid plans offer
If you're concerned about implementing a pricing strategy for your membership site and scaring people off then let us put your fears at rest. Our data shows that, the sites that have paid plans available and plans for paid membership, they can offer paid plans. 77% of those that offer the option of paying selling. This means that your odds to sell your membership very high! Which is good!
In the event that you're contemplating an online business model that is freemium that allows users to get a free access and purchase upsells for a fee then you're in luck too. Freemium still have the highest conversion rate at 70% to their products.
There is no need for thousands of fans
Many of us members are selling memberships to communities without enormous followers. 53% of them are less than 10,000 followers!
The growth process is organic
In the framework of a Mighty Network, the Host is able to allow users to invite their friends into the network. In a paid community, this organic growth with members inviting friends to join is double the amount it is in a free community.
Paid membership drives engagement
A well-worn adage states that people value what they pay for, which is the case with memberships as well. We see a higher degree of participation in our memberships that are paid. You don't have to post 100x a week to make it happen. The most popular Hosts just have to publish 2-4 times a week for their communities to stay alive.
Cost of membership for a typical site for the Mighty Network
The average price of a Mighty Network is $39.55/mo. For many of the larger communities, this fee helps the creator full-time. But even in a smaller community, this price means a fantastic side hustle AND an even better model for monetizing than almost any other option in the creator economy. You would need tens of thousands to billions of views on social media channels to match this income.
And with the ability to take orders over $1000 You also have the opportunity to explore high-ticket classes and memberships without having to add another platform.
Considerations to make when pricing a membership site
So if you're trying to figure out exactly what price you should charge for your membership website Our data suggests an average of between $15-$40. This doesn't mean you can't increase the price in specific instances however, it's going to require some strategy.
Here are some questions to get you started on pricing your own website:
Can it scale?
Every membership website is not made to be the same. There are some that can be scaled infinitely and there are communities that have many thousands of people in them. These huge communities give the creators plenty of freedom to charge less for membership since they're recouping costs based on the size.
However, if you're operating a community that was small in size, for example group coaching or a mastermind group where you will be limited in members who you could serve, then it's likely that you'll need to charge more.
How does it fit into your business model for revenue?
The pricing of a membership site isn't considered a standalone thing. You should consider it as an integral part of the model for monetization. If you are offering upsells like courses or premium group access, then you'll wish to keep the cost of membership as low as you realize that it is easier to sell to members of your community than to try to market your products elsewhere.
If you sell the physical item your site's membership program supports You could decide to offer a customer community on a free basis or at a small fee to help customers use the product. Find out how any member revenues will fit into your current and planned income streams.
How much do you require to go on?
It's easy to become fascinated by the possibility of the possibility of monthly recurring income. Since the internet is filled with stories about people who make a ton of money doing minimal work, it's simple to think your community will become your path to wealth.
We hope that it's the case!
However, if you don't get tons of new users signing up in for the initial month, what will you need to keep going?
If you're planning to put work into the community each month, what's your baseline of income you'd need for that period?
For instance, say you're confident you could get 15 members (or maybe you can even offer 15 memberships in advance). Even if you just were able to keep those 15 members the next year, how much would you have to charge them to give the community a worth investment?
Pricing Factors
As you may have gathered, when trying to decide what to cost a membership site, there's no one-size-fits-all approach. You'll be considering a lot of factors that are unique to you. Here are some final things you should think about:
Members have to be invested
As we said above One of the issues we see again and again is that people appreciate the value they get for their money. This means that, while this may seem counterintuitive, communities that charge something are often healthier and have greater engagement among members.
Value-based pricing
One of the known and tried methods to consider pricing is through thinking about it. Instead of thinking about how much time you put into something in order to make it. Think about the worth it's going to have to the people that join. As an example, suppose that an entrepreneur is a part of a community and gains the experience as well as the guidance, instruction, and motivation to grow their business from zero to $100k per year, how much is the value of that membership to them?
Take into account your members' choices
What ELSE could your customers have to pay for to get what they'll see by joining your group. If you're in an exercise center that aids individuals achieve their health goals, consider what they'd have to pay for to reach those goals otherwise. Personal trainers? A gym membership?
Think about the amount members need to spend to reach their objectives through other methods.
Pricing is based on income targets
One of the other considerations that could impact the pricing structure for your membership website is your income target. Let's say you wanted to make $4,000/mo in order to quit your day job, you could use this figure to calculate backward and determine your revenue objectives.
So for example, if you were pretty confident there would be 100 members willing to be part of your group You could set a price of $40. If you were hoping to earn $4,000/mo as a group coach and you decide that you don't want a community with 100 participants. In this scenario, you can reverse your work based on your capacity. If you know that you could manage 6 groups per month, with eight participants, your membership fee becomes an algebraic equation which is: 4,400 (or (6 x 8) equals $83.33/mo.
One-time vs recurring fees
Most of what we've shared below is based upon an idea of regular monthly membership fees. However, there are instances where it makes more sense charging a single fee. For example, if you have a high-value course that people can do in two weeks that is included in your membership it is possible that some of them might decide to attend the class but then decide to leave. It could be the case in which a once-off cost that provides the benefit of 6 months of complimentary membership would be more appropriate.
Membership churn
New sites won't know the number at this point, however, once you've been up for some time, you'll be able to know the percentage of your members who leavefor e.g. the length of time members remain for on average and the number of members who quit each month. This information can be used to determine your pricing strategy in order for achieving a specific value per member.
Conclusion
As you've seen above, there's no one solution to the question of how much you should charge for your membership site. One of the best options is take these things into consideration and come up with the price that is reasonable for you based on what your users will get from it.
If you're searching for an ideal location to create an impressive membership community with a platform that lets you sell classes, host discussion forums streaming live, or engage your members with the app, you can try without cost!